New Jersey has filed three lawsuits accusing 15 corporations and 21 individuals of conspiring to defraud borrowers and mortgage lenders out of more than $5 million. Each case involves at least one mortgage broker that played a key role.
The lawsuits were filed by the state’s Attorney General Anne Milgram in state superior court, a press release today said. All three complaints allege violations of both the New Jersey Consumer Fraud Act and the New Jersey Racketeer Influenced and Corrupt Organizations Act.
Milgram said more than 25 properties were involved, with fraudulent loans exceeding $5 million.
Among the defendants in one of the lawsuits were Ultimate Real Estate Solutions LLC, Empire Equity Group Inc. doing business as 1st Metropolitan Mortgage Services, TMR Appraisal Services Inc. and NLS Appraisal Service Inc. That complaint was filed in Camden County.
The defendants are accused of acquiring properties using fraudulent loan applications, then leasing the home to “bad credit” tenants who were led to believe they were buying the properties on a lease-purchase. But no payments were made on the mortgages even though rent payments were collected. The properties ultimately went into foreclosure.
Thousands of dollars in fees and deposits were collected from the tenants.
By processing fraudulent mortgages, broker 1st Metropolitan was able to pocket broker fees.
The defendants were additionally accused of violating the Credit Repair Organizations Act and state advertising regulations.
A second lawsuit filed in Passaic County named mortgage broker American Millenium Company LLC, dba American Mortgage Co., and Radell Appraisal Services LLC among the defendants.
The defendants allegedly recruited investors using false promises, then submitted bogus loan packages with inflated property values to lenders and collected their fees.
A&E Mortgage Company LLC, also know as Colony Financial Services LLC, was among defendants named in the third lawsuit, which was filed in Essex County.
A&E, a mortgage broker, allegedly placed borrowers in predatory loans based on “misrepresentations and falsified information,” offered bogus foreclosure rescue services and engaged in a practice know as “inflated sale and crash,” where investors purchase properties at inflated prices using mortgage fraud.
A&E is also additionally charged with the federal Credit Repair Organizations Act.
“The actions alleged in these lawsuits are unconscionable,” the announcement said.
Anne Milgram, Attorney General of the State of New Jersey, and David Szuchman, Director of the New Jersey Division of Consumer Affairs, v. Ultimate Real Estate Solutions, L.L.C., et al
Anne Milgram, Attorney General of the State of New Jersey, and David Szuchman, Director of the New Jersey Division of Consumer Affairs, v. American Millenium Company, L.L.C., dba American Mortgage Company, et al
Anne Milgram, Attorney General of the State of New Jersey, and David Szuchman, Director of the New Jersey Division of Consumer Affairs, v. A&E Mortgage Company, L.L.C., aka Colony Financial Services, L.L.C., et al
